PSU banks gain ground; shares surge up to 9%

Shares of the recently-battered public sector lenders today gained up to 9 per cent amid improved market sentiment and hopes of major banking sector reforms.
SBI climbed 7.94 per cent to settle at Rs 167.25 on BSE. During the day, it rose 9.58 per cent to Rs 169.80.
Similarly, Union Bank of India zoomed 9.03 per cent, Allahabad Bank 6.79 per cent, Bank of India 5.66 per cent, Oriental Bank of Commerce 5.54 per cent and United Bank of India 5.17 per cent.
Among others, Punjab National Bank was up 3.78 per cent, Indian Overseas Bank rose 3.74 per cent, Dena Bank 3.44 per cent, IDBI Bank 3.17 per cent and Central Bank of India 2.50 per cent.

Consequently, the BSE bank index gained 3.62 per cent to end at 16,427.78.
In the broader market, the Sensex surged 568 points or 2.47 per cent to end at 23,554.12.

Hinting at major banking sector reforms in the offing, Finance Minister Arun Jaitley yesterday said the country is not at a stage where the government can completely exit its holding in the 27 public sector banks.
"There are a series of banking reforms which I am likely to announce...In the days to come, you may find something on that," said Jaitley, who will present the Union Budget on February 29.

Market experts also attributed that value buying at lower levels spurred buying in these stocks.
State-run lenders posted poor set of earnings for the December quarter. Bank of Baroda and IDBI Bank posted the highest losses in Indian banking history, while others like Indian Overseas Bank and Dena Bank were also in the red.
Those who managed to be in the black witnessed a huge spurt in bad assets and provisioning, attributed largely to an asset quality review undertaken by the RBI.